Gujarat High Court
The Commissioner, Cgst And Central ... vs M/S Ratnamani Metals And Tubes Ltd. on 26 March, 2020
Author: Harsha Devani
Bench: Harsha Devani, Sangeeta K. Vishen
C/TAXAP/535/2019 IA JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 535 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 585 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 592 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 593 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 594 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 664 of 2019
With
MISC. CIVIL APPLICATION (FOR REVIEW) NO. 1 of 2019
In R/TAX APPEAL NO. 666 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
==========================================================
1 Whether Reporters of Local Papers may be allowed to No see the judgment ?
2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the No judgment ?
4 Whether this case involves a substantial question of law No as to the interpretation of the Constitution of India or any order made thereunder ?
Page 1 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020C/TAXAP/535/2019 IA JUDGMENT ========================================================== THE COMMISSIONER, CGST AND CENTRAL EXCISE Versus M/S RATNAMANI METALS AND TUBES LTD.
========================================================== Appearance:
MR ANKIT SHAH for the PETITIONER(s) No. MR PARESH M DAVE for the RESPONDENT(s) No. ========================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Date : 26/03/2020 COMMON IA JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By these applications, the applicant (original appellant) seeks review of the order dated 26.09.2019 passed by this court in Tax Appeal No.535 of 2019, whereby this court had disposed of the appeals as being not maintainable on the ground that the question involved in the appeal had a direct bearing on the rate of duty and value of goods for the purposes of assessment and hence, in the light of the provisions of section 35G read with section 35L of the Central Excise Act, 1944, the appeal is not maintainable.
2. It is the case of the applicant that this court while passing the order dated 26.09.2019 had placed reliance upon a decision of this court in Commissioner of central excise v. JBF Industries Ltd., 2011 (264) ELT 162 (Guj.); however, on
05.09.2019, the Supreme Court has rendered a decision in the case of Commissioner of Customs, Bangalore - 1 v. M/s Motorola India Ltd. passed in Civil Appeal No.10083 of 2011, holding an observing inter alia as under:
Page 2 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020C/TAXAP/535/2019 IA JUDGMENT "16. We are of the considered view that the Legislature has carved out only following categories to which it has intended to give a special treatment of providing an appeal directly to this court.
(i) determination of a question relating to a rate of duty;
(ii) determination of a question relating to the valuation of goods for the purpose of assessment;
(iii) determination of a question relating to the classification of goods under the Tariff and whether or not they are covered by an exemption notification;
(iv) whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for."
3. It is the case of the applicant that the above decision of the Supreme Court was inadvertently not brought to the notice of this court on 26.09.2019; and that in the light of the principles enunciated therein, the appeals would be maintainable before this court. According to the applicant, an error apparent on record has occurred necessitating invocation of the review jurisdiction of this court.
4. Mr. Ankit Shah, learned senior standing counsel for the applicant reiterated the averments made in the application.
5. On the other hand, Mr. Paresh Dave learned counsel for the respondent vehemently opposed the application. It was submitted that the order dated 26.09.2019 passed by this court is in consonance with the provisions of section 35G read with section 35L of the Central Excise Act, 1944 and that even if the decision of the Supreme Court in M/s Motorola India Ltd. (supra) is applied to the facts of the present case, the appeals would still not be maintainable, and hence, there is no Page 3 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT warrant for exercise of powers of review.
5.1 It was submitted that the question involved in the appeals is as regards the applicability of the exemption notification; whereas the case before the Supreme Court in M/s Motorola India Ltd. (supra) involved an issue regarding violation of conditions contained in the customs exemption notification and that the question of applicability of the notification was not in dispute. It was submitted that the issue in that case was regarding recovery of customs duty and interest for breach of conditions of the notification. It was pointed out that the Supreme Court in paragraph 16 of the judgment has carved out categories of cases in which the Legislature intended to give special treatment of providing an appeal directed to the Supreme Court; one such category is:
(iii) determination of a question relating to the classification of goods under the Tariff and whether or not they are covered by an exemption notification.
5.2 It was submitted that the only question involved in the case of M/s. Motorola India Ltd. (supra) was whether the assessee had violated the conditions of the exemption notification by not utilising the imported materials for manufacturing of declared final product and was, therefore, liable for payment of duty, interest and penalty; whereas the controversy in the present case is whether the goods manufactured by the job worker would be entitled to exemption. It was urged that the question as to whether the supplier is qualified for exemption under the notification is the core issue involved in this case, which is a question which is directly related to the rate of duty and hence, appeal against Page 4 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT the order of the Tribunal would lie before the Supreme Court and not before this court.
5.3 In support of his submission, the learned counsel placed reliance upon the decision of the Punjab and Haryana High Court in Commissioner of Central Excise, Panchkula v. Special Machine, 2009 (242) ELT 330 (P&H) wherein the court held thus:
"10 . Having heard learned counsel for the parties and perusing the paper book with their able assistance we are of the considered view that there is merit in the preliminary objections raised by the assessee-respondent regarding maintainability of the appeal. A similar controversy whether an assessee is covered by an exemption notification relating to rate of duty or not came up for consideration before a Division Bench of this Court in the matter of Commissioner of Central Excise, Ludhiana v. A.S.T. Paper Mills Ltd., 2008 (227) E.L.T. 189 (P&H). The Division Bench after discussing the matter in detail, especially in the light of judgment of Hon'ble the Supreme Court rendered in the case of Navin Chemicals Manufacturing and Trading Company Limited v. Collector of Customs, 1993 (68) E.L.T. 3 (S.C.), has held that since the question of law raised in that appeal was relating to determination of a question having relation to the rate of duty of excise, therefore, for determination of such question the appeal does not lie to this Court and the same has to be filed before Hon'ble the Supreme Court under Section 35L of the Act. Hon'ble the Supreme Court in the case of Navin Chemicals (supra) has categorically held that the expression 'determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment' used in the other part should be interpreted similarly. A dispute as to whether or not the assessee is covered by an exemption notification, relates directly and proximately to the rate of duty applicable thereto for the purpose of assessment. The Division Bench also placed reliance upon another judgment of this Court rendered in the case of Commissioner of Central Excise, Chandigarh-1 v. Suraj Page 5 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT Udyog Ltd., 2003 (158) E.L.T. 684 (P&H)."
5.4 It was submitted that thus, whether goods are covered by exemption notification is also a question relating to rate of duty.
5.5 Reliance was also placed upon the decision of the Madras High Court in Maruti Udyog Ltd. v. Commissioner of Customs (Sea Port/Import), Chennai, 2019 (369) ELT 354 (Mad.) wherein the court held thus:
"11. The short issue which arises for consideration is "Whether the appellant would be entitled to exemption under Notification No.94/96-Cus., dated 16/12/1996 or not?"
xxx xxx xxx
15. Learned counsel for the revenue, relied on the judgment of the Hon'ble Supreme Court in Navin Chemicals MFG & Trading Co. Ltd., Vs. Collector of Customs, reported in 1993 (68) ELT (3) SC. Paragraph Nos.7 to 12, which lays down the law, reads as under.
"7. The controversy, therefore, relates to the meaning to be given to the expression 'determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment'. It seems to us that the key lies in the words 'for purposes of assessment' therein. Where the appeal involves the determination of any question that has a relation to the rate of customs duty for the purposes of assessment that appeal mast be heard by a Special Bench. Similarly, where the appeal involves the determination of any question that has a relation to the value of goods for the purposes of assessment, that appeal must be heard by a Special Bench. Cases that relate to the rate of customs duty for the purposes of assessment and which relate to the value of goods for the purposes of assessment are advised treated separately and placed before Page 6 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT Special Benches for decision because they, more often than not, are of importance not only to the importers who are parties thereto but also to many other importers who import or propose to import the same or similar goods. Since the decisions of CEGAT in such matters would have wide application they are, by the terms of the statute, to be rendered by Special Benches. The phrase 'relation to" is, ordinarily, of wide import but, in the context of its use in the said expression in Section 129-C, it must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment.
8. Before we consider whether the case of the appellant fails within the said expression, we must note that Section 130, Sub-section (l) and Section 130-E, Clause (b) of the said Act also use the said expression and they refer respectively to the Statement of Case to the High Court on a reference by CEGAT and an appeal to the Supreme Court directly. Section 130(1) states that the Collector of Customs or the other party may require CEGAT to refer to the High Court any question of law arising out of an order under appeal before it provided it is not an order relating among other things to the 'determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment'. Clause (b) of Section 130-E provides that an appeal shall lie to the Supreme Court from 'any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate, of duty of customs or to the value of goods for purposes of assessment'.
9. The importance of the present appeal lies not so much in deciding which appeals can be heard by a member of CEGAT sitting singly and which by a Special Bench thereof as in determining where a reference can be made by CEGAT to the High Court and in which cases an appeal against an order of CEGAT can be filed directly before the Supreme Court. Where an appeal lies to the Supreme Court, the necessity of the reference on a question of law to the High Court is obviated. An appeal to this Page 7 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT Court is provided where, as aforementioned, the questions in issue, relating to the rates of duty or the value of goods for the purposes of assessment, have relevance not only for the parties there concerned but for other importers as well.
10. Section 129-D deals with the powers of the Central Board of Excise and Customs and the Collector of Customs to call for and examine the record of any proceedings before authorities subordinate thereto and examine the legality or propriety thereof and also to direct such authorities to file appeals. Sub-section 5 was added to Section 129-D by the Customs & Central Excise Laws Amendment Act, 1988 and it reads thus:
(5) The provisions of this section shall not apply to any decision or order in which the determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment of any duty is in issue or is one of the points in issue.
Explanation - For the purposes of this sub-section, the determination of a rate of duty in relation to any goods or valuation of any goods or valuation of any goods for the purposes of assessment of duty includes the determination of a question.-
(a) relating to the rate of duty for the time being in force, whether under the Customs Tariff Act, 1975 (51 of 1975), or under any other Central Act providing for the levy and collection of any duty of customs, in relation to any goods on or after the 28th day of February, 1986; or
(b) relating to the value of goods for the purposes of assessment of any duty in cases where the assessment is made on or after the 28th day of February, 1986; or
(c) whether any goods fall under a particular heading or sub- heading of the First Schedule or the Second Schedule to the Customs Tariff Act, 1975 (51 of 1975), or that any goods are or not covered by a particular notification or order issued by the Central Government granting total or partial exemption from duty; or Page 8 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT
(d) whether the value of any goods for the purposes of assessment of duty shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically provided in this Act.
11. It will be seen that Sub-section (5) uses the said expression 'determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment' and the Explanation thereto provides a definition of it 'for the purposes of this sub-section'. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes/of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation expressly confines the definition of the said expression to Sub-section (5) of Section 129-D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have, given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods.
12. This, then, is the test for the purposes of Page 9 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT determining whether or not an appeal should be heard by a Special Bench of CEGAT, whether or not a reference by CEGAT lies to the High Court and whether or not an appeal lies directly to the Supreme Court from a decision of CEGAT : does the question that requires determination have a direct and proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods." (emphasis supplied)
16. The said judgment squarely applicable to the facts of this case. The issue as to whether the appellant would be entitled to the benefit of exemption Notification is a matter, which can be decided only by the Hon'ble Supreme Court.
17. The above said judgment has also been followed by the High Court of Madras in the case of Commissioner of Customs (Exports),Chennai Vs. D.S.Metal (P) Ltd., reported in 2015 (323) ELT 328. This Court after quoting the judgment in Navin Chemicals in paragraph Nos.5 to 7, observed as under:-
5. The present appeal is filed under Section 130 of the Customs Act and it is apposite to refer to Section 130(1) of the Customs Act, which reads as under :
"130. Appeal to High Court (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purpose of assessment), if the High Court is satisfied that the case involves a substantial question of law"
(emphasis supplied)
6. In the present case, the issue that arises for consideration is what will be the rate of duty that is payable by the first respondent, but for the notification in question. Therefore, the objection of the learned counsel for the first respondent is sustained.
7. The above said view of this Court is fortified by a decision of the Gujarat High Court in Commissioner Page 10 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT of Central Excise V JBF Industries Ltd., 2011 (264) E.L.T. 162 (GUJ), wherein it is held as under :
"10. In the light of the aforesaid judicial pronouncements, it is apparent that the question as to the applicability of a notification or a circular which has a bearing on the determination of the rate of duty is a question which has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. In the circumstances, the present appeal which relates to the applicability of the above referred circular, relates directly to the determination of rate of duty for the purpose of assessment and as such, in the light of the provisions of Section 35G read with Section 35L of the Act, this Court has no jurisdiction to entertain the appeal." (emphasis supplied) For the foregoing reasons, we hold this appeal is not maintainable and accordingly, the same is dismissed giving liberty to the appellant to pursue the matter before the appropriate forum. Since the appeal is held not maintainable, we do not propose to go into the merits of the questions of law raised for consideration. No costs."
5.6 Reference was made to the decision of the Kerala High Court in C.C.E., C.&S.T., Thiruvananthapuram v. Kerala State Beverages, 2014 (300) ELT 217 (Ker.) "4. The ratio of the precedents cited in support of the objection as to maintainability is that the question as to whether any goods are excisable or not, would also fall within the exclusion in terms of sub-section (1)) of Section 35G and that the bifurcation of jurisdiction between the Supreme Court and the High Courts seems to be clearly intended, also to exclude conflict of opinions between the different High Courts on matters which relate to issues having national impact in the fiscal scenario. We see abundant substance and support for this view in the manner in which the provisions of Section 35G relating to exclusion of jurisdiction of the High Court need to be understood. Section 35G(1) provides, among Page 11 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT other things, that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment). The precedents noted above are rendered dilating on the concept of the term 'rate'. The question whether any particular transaction or goods is excisable is an issue directly linked to the question as to what would be the rate of duty of excise. If it is not liable for levy of excise duty, then it would be a case of 0% or 'nil'. The question of coverage is, thus a matter intrinsically linked with the determination of questions having a relation to the rate of duty of excise. Not only that, the phrase "any question having a relation to the rate of duty of excise" is part of the exclusionary clause in Section 35G(1). Reverting to Section 35L, we notice that clause (b) thereof provides for an appeal to the Supreme Court from any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise. This means that anything attendant to the determination of any question having a relation to the rate of duty of excise would also fall within the trappings of the exclusion, thus, taking the jurisdiction away from the High Court; to be agitated before the Supreme Court in terms of Section 35L;
5. Thinking a little deeper, if we were to understand the classification on jurisdiction to be that what would fall before the Apex Court are only appeals either as to the rate of duty or as to the value of goods for the purpose of assessment, we may immediately note that rate of tax is a prescription of the Parliament and it is not part of judicial function to tinker with the rate of tax. This has also been noticed in Karnataka State Beverages Corpn. Ltd. (supra). Secondly and more importantly, if we were to find jurisdiction with the High Courts to decide as to whether there could be levy of duty of excise in relation to a particular situation, incidence or goods, that would be conceding to the position that what would be left to the Supreme Court is only to determine the rate of tax and the value of goods for the purpose of assessment which matters would get confined to issues which are fundamentally inferior in jurisprudential content vis-a-vis questions relating to the coverage itself. We do not see Page 12 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT that the Act envisages that the High Courts would have the power of such nature that they decide the question of coverage; leaving to the Supreme Court only issues relating to the rates, sans the issue of coverage. We say this in furtherance of the reasoning that led to the precedents cited on behalf of the respondent."
5.7 It was submitted that coverage and rate of duty are two propositions. Whether conditions of notification are satisfied or not is also relevant to determine the rate of duty. Charging section and rate make a harmonious interpretation.
5.8 Reliance was also placed upon the decision of this court in Commissioner of Central excise v. JBF industries Ltd., 2011 (264) ELT 162, wherein the court held thus:
"6. A perusal of the order of the Commissioner (Appeals) indicates that the issue involved in the present case pertains to the applicability of Circular No.641/32/2002- CX dated 26th June, 2002 whereby goods exported under bond have been exempted under levy to NCCD.
7. The Supreme Court in the case of Navin Chemicals Mfg. & Trading Co. Ltd. vs. Collector of Customs, 1993 (68) E.L.T. 3 (S.C.) has held that a dispute as to classification of goods and as to whether or not they are covered by an exemption notification relates directly or proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question which relates directly and proximately to the value of goods for purposes of assessment.
8. The Punjab & Haryana High Court in the case of Commissioner of Central Excise, Panchkula vs. Special Machine, 2009 (242) E.L.T. 330 (P&H) has held that a dispute as to whether or not the assessee is covered by exemption notification, relates directly and proximately to the rate of duty applicable thereto for the purposes of assessment, and therefore the appeals would lie before the Supreme Court and not before the High Court.
Page 13 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020C/TAXAP/535/2019 IA JUDGMENT
9. The Bombay High Court in the case of Sterlite Optical Technologies Ltd. vs. Commissioner of Central Excise, Aurangabad, 2007 (213) E.L.T. 658 (Bom.) has held thus:
"22. The word "assessment" is used as meaning sometimes the computation of rate of duty, sometimes the assessable value of goods and sometimes the whole procedure laid down under the Act for imposing duty liability upon the manufacturer or importer. The word assessment is, thus, capable of bearing a very comprehensive meaning; in the context, it can comprehend the whole procedure for ascertaining and imposing duty liability. The word "levy" was interpreted by the Supreme Court in the case of Asstt. Collector of Central Excise v. National Tobbaco of India Ltd., AIR 1972 SC 2563 as embracing within it the process of assessment and also imposition of tax. The term 'levy' appears to be wider in it's import than the term 'assessment'. It may include with "imposition"
of tax as well as 'assessment'.
23. Considered on the above backdrops, the question of determination of status of the subject Unit will be one of the steps in the process of assessment. This exercise would be an exercise; which can be said to be part of the assessment. In this view of the matter, in our view, the dispute involved in the appeal and the substance thereof is:
what should be rate of duty on the goods cleared to the Domestic Tarrif Area (D.T.A.). We have, thus, no hesitation to hold that the direct and proximate issues involved in the appeal for the purposes of assessment relate to the rate of duty applicable to the goods and the value thereof and the issue requiring determination of the status of the subject Unit would be one of the incidental issues. The contentions raised by the appellants, catalogued in Para (19) supra, also revolve around the rate of duty and valuation of goods for the purposes of assessment."
10. In the light of the aforesaid judicial pronouncements, it is apparent that the question as to the applicability of a notification or a circular which has a bearing on the determination of the rate of duty is a question which has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. In Page 14 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT the circumstances, the present appeal which relates to the applicability of the above referred circular, relates directly to the determination of rate of duty for the purpose of assessment and as such, in the light of the provisions of section 35G read with section 35L of the Act, this Court has no jurisdiction to entertain the appeal."
5.9 It was submitted that applicability of the notification would comprise of coverage, viz., scope of notification, namely, coverage of goods or manufacturers, identity of supplier. It was submitted that if there is a dispute as to whether conditions of a notification are satisfied or not, the same involves a determination in relation to the rate of duty. It was submitted that the question of coverage of notification is involved in this case as to whether it is only the respondent unit which is covered by the notification or even the other units. The applicability of the notification is also in issue as to whether the notification applies to job workers also or only to the principal manufacturer. It was submitted that whether exemption is admissible to manufacturer has multiple facets and if yes, what procedure should be followed.
5.10 The attention of the court was invited to paragraph 3 of the impugned order passed by the Tribunal wherein reference is made to the contents of the show cause notice dated 29.04.2010, to submit that the following questions were before the Tribunal.
(1) Demand of duty was made from the Division which undertook the job work activity. In case of job work activity undertaken by the Kutch Division, it was alleged that they have misused the benefit of Notification Page 15 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT No.39/2001 dated 3.7.2001 as the goods manufactured at Saw Pipe Division, Chhatral and Stainless Tubes & Pipe Division, Indrad have been cleared for home consumption on the basis of invoice of Kutch Division.
(2) That the goods manufactured at Kutch Division were exported by showing them as having been manufactured by SSTP or SP Division and that the provisions of job work were being misused to legitimize these transactions.
(3) It was alleged that the goods manufactured by the assessee were customer specific goods. The assessee was allotted unique number to purchase orders received from customer which was termed as "Work Order" and separate records were maintained for each work order.
(4) That in case of Work Order No.465 (Lot 8) and (Lot 5), the work order was allotted to Mobile Jamnagar Plant and the clearance of goods was exempted from duty in terms of Notification No.108/95-CE dated 28.8.1995. The pipes were manufactured by Jamnagar Division on job work basis and cleared by Jamnagar Mobile Plant to GWSSB.
(5) That no undertaking under Notification No.214/86-CE dated 25.3.1986 was filed with the said Division before jurisdictional authority and, therefore, Jamnagar Mobile Plant cannot be considered as job worker. Even the permission given by the Commissioner was subject to fulfilment of condition of Trade Notice No.36/2003 that the original and duplicate copies of challan shall accompany the inputs or partially processed input which Page 16 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT was not followed. The Jamnagar Mobile Plant has not worked as job worker but independent manufacturer.
(6) Central Excise Duty of Rs.1,03,52,230/- was demanded from Dehgam Mobile Plant on the ground that the activity undertaken by them on account of SP Division cannot be considered as job work and they being manufacturer are liable for duty.
(7) Central Excise Duty of Rs.5,79,34,667/- was demanded from Kutch Division on the ground that the pipes covered under Work Order No.465 (Lot 8) were manufactured by Jamnagar Mobile Plant but were cleared under the cover of invoice of SSTP Division or SP Division.
5.11 It was submitted that the Tribunal has decided the question of coverage, which is directly related to the question of determination of rate of duty. It was submitted that the order dated 26.09.2019 passed by the court is in consonance with the principles enunciated by the Supreme Court in M/s Motorola India Ltd. (supra) and hence, no case is made out for review of the said decision.
6. Since reliance has been placed by the appellant on the decision of the Supreme Court in M/s Motorola India Ltd. (supra) for the purpose of filing the present review application, reference may be made to the relevant extracts thereof, which read as under:
"2. A short question that arises for consideration in these appeals is as to whether an appeal from the order of Customs Excise and Service Tax Appellate Tribunal Page 17 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT (hereinafter referred to as the "CESTAT"), involving an issue regarding violation of conditions contained in customs exemption notification, would lie before the High Court under the provisions of Section 130 of the Customs Act, 1962 (hereinafter referred to as the "Customs Act") or to this Court under the provisions of Section 130E of the Customs Act."
"9. Upon a conjoint reading of the aforesaid provisions, it could thus be seen that an appeal shall lie to the High Court against every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. The only exception carved out is that an appeal shall lie before this Court and shall not lie before the High Court against the order relating, amongst other things, to the determination of any question having relation to the rate of duty of customs or to the value of goods for the purposes of assessment.
10. It could thus clearly be seen that, only if any question having relation to the rate of duty is involved in an appeal or if it relates to value of goods for the purpose of assessment, the appeal would lie to this Court and in all other cases it would lie before the High Court."
"11. However, the issue is no more res integra. In a catena of the judgments, right from the judgment of this Court in the case of Navin Chemicals Manufacturing & Trading Company Ltd. v. Collector of Customs, reported in (1993) 4 SCC 320, the position has been clarified. We may gainfully refer to paragraphs 6, 7 and 11 of the said judgment wherein, this Court considered the provisions of Section 130 and Section 130E of the Customs Act. They read thus:
6. xxx xxx xx
7. xxx xxx xxx
11. It will be seen that sub-section (5) uses the said expression 'determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment' and the Explanation thereto provides a definition of it 'for the purposes of this sub-section'. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and Page 18 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Xxxxx"
"16. We are of the considered view that the Legislature has carved out only following categories of cases to which it has intended to give a special treatment of providing an appeal directly to this court.
"(i) determination of a question relating to a rate of duty;
(ii) determination of a question relating to the valuation of goods for the purpose of assessment;
(iii) determination of a question relating to the classification of goods under the Tariff and whether or not they are covered by an exemption notification;
(iv) whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for."
7. It may be pertinent to note that while the sole ground for filing the present review application is that the decision of the Supreme Court in M/s Motorola India Ltd. (supra) could not be pointed out to the court at the time when it passed the order dated 26.09.2019 disposing of the appeals as not maintainable, neither have any averments been made in the application nor has the learned senior standing counsel for the applicant advanced any submissions as to how the said decision would be applicable to the facts of the present case. In the memorandum of application, the contents of paragraph 16 and 17 of the above decision have been reproduced and thereafter it has been stated thus:
"4. It seems that the afore-referred decision of the Hon'ble Supreme Court was inadvertently not brought to the notice of this Hon'ble Court on 26.09.2019. However, because of the decision rendered by the Hon'ble Page 19 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT Supreme Court through its Larger Bench, the appeals would be maintainable before this Hon'ble Court and in that view of the matter, an error apparent on the face of the record has occurred necessitating filing of the present application praying for review and recall of the order of this Hon'ble Court dated 26.09.2019.
5. It is submitted that considering the apparent error that has crept in on the record, present is a fit case to review the order dated 26.09.2019, more particularly, when the same would render Hon'ble Supreme Court's decision delivered by a Larger Bench nugatory and in that view of the matter also, the present application is required to be allowed and the order dated 26.09.2019 is required to be reviewed and the present appeal is required to be restored to its file for being decided on merits."
8. At this stage, it may be germane to refer to the decision of the Supreme Court in the Meera Bhanja v. Nirmala Kumari Choudhury, (1995) 1 SCC 170:
"8. It is well settled that the review proceedings are not by way of an appeal and have to be strictly confined to the scope and ambit of Order 47, Rule 1, CPC. In connection with the limitation of the powers of the court under Order 47, Rule 1, while dealing with similar jurisdiction available to the High Court while seeking to review the orders under Article 226 of the Constitution of India, this Court, in the case of Aribam Tuleshwar Sharma v. Aribam Pishak Sharma, (1979) 4 SCC 389, speaking through Chinnappa Reddy, J., has made the following pertinent observations:
"It is true as observed by this Court in Shivdeo Singh v. State of Punjab, AIR 1963 SC 1909, there is nothing in Article 226 of the Constitution to preclude the High Court from exercising the power of review which inheres in every Court of plenary jurisdiction to prevent miscarriage of justice or to correct grave and palpable errors committed by it. But, there are definitive limits to the exercise of the power of review. The power of review may be exercised on the discovery of new and important matter or evidence Page 20 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made; it may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground. But, it may not be exercised on the ground that the decision was erroneous on merits. That would be the province of a court of appeal. A power of review is not to be confused with appellate power which may enable an appellate court to correct all manner of errors committed by the subordinate court."
9. Now it is also to be kept in view that in the impugned judgment, the Division Bench of the High Court has clearly observed that they were entertaining the review petition only on the ground of error apparent on the face of the record and not on any other ground. So far as that aspect is concerned, it has to be kept in view that an error apparent on the face of record must be such an error which must strike one on mere looking at the record and would not require any long-drawn process of reasoning on points where there may conceivably be two opinions. We may usefully refer to the observations of this Court in the case of Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale, AIR 1960 SC 137, wherein, K.C. Das Gupta, J., speaking for the Court has made the following observations in connection with an error apparent on the face of the record:
An error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ."
9. In the present case, the applicant has invoked the review jurisdiction of this court on the ground that there is an error apparent on the face of the record. The Supreme Court in the Page 21 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020 C/TAXAP/535/2019 IA JUDGMENT above decision has held that an error apparent on the face of the record must be an error which must strike one on mere looking at the record and would not require any long-drawn process of reasoning on points where there may conceivably be two opinions. It may be pertinent to note that the learned senior standing counsel has not pointed out any error apparent on the face of the record in the order dated 26.09.2019, the only ground which is urged in the memorandum of application is that the decision of the Supreme Court in M/s Motorola India Ltd (supra) could not be shown to the court. Moreover, nothing has been pointed out as to how the order dated 26.09.2019 passed by this court is not in consonance with the above decision.
10. From the contentions put forth by the learned counsel for the respondent, it is manifest that the matter would require a long-drawn process of reasoning on a point on which there may conceivable be two opinions. Under the circumstances, it cannot be said that the order dated 26.09.2019 suffers from any error apparent on the face of the record, warranting interference.
11. In the light of the above discussion, the applications fail and are accordingly, rejected. Notice is discharged with no order as to costs.
(HARSHA DEVANI, J) (SANGEETA K. VISHEN,J) Z.G. SHAIKH Page 22 of 22 Downloaded on : Thu Mar 26 21:03:43 IST 2020